Debt reduction may mean one thing to Washington politicians, but many Americans define it as wondering how they’re going to pay their bills.

There are no quick fixes, so don’t call some firm whose radio or TV ads promise to “get rid of all your bills.”
Instead, consider these basic steps:

Pay more than the minimum on credit cardsYour statement shows how long it will take to pay off your balance if you pay only the minimum. That should encourage you to pay more when possible. However, there are some situations where it may be wiser to “snowball.”

“Snowball” if you have several cardsMake a list of your credit cards according to balance. Pay the most you can on the largest balance, and make minimum payments on the others. When you pay off the first card, focus on the next highest balance. With each card you pay off, you have more funds available to tackle the next one, so you gather ‘momentum’ like a snowball.

Prepare a personal spending diaryMerely tracking your spending isn’t enough. You should also analyze where your money goes to identify patterns of use. Divide your expenditures into groups such as Fixed Bills, Household Essentials, Entertainment, Vehicle Fuel/Maintenance and other pertinent categories. If one category takes a disproportionate amount of your income, try to find lower cost alternatives, or discuss if you can do without.

Create a well-defined spending planPlan your spending with as much care as you do your household budget. Before starting, identify specifically what you need. For example, don’t just jot down “New school clothes”; list how many skirts, how many pairs of pants, what kind of computer peripherals, etc. Shopping online when possible helps you avoid impulse buying, compare prices and find coupons and special offers.

If you’re in over your head, remember that as the Trojan Family’s financial partner, we may be able to help. Call or visit any branch.